While only eight industries grew in the second quarter, nine of them grew in the third quarter, supporting the overall GDP.
GDP increased for the fourth straight quarter as economic activity increased, expanding by 0.5% in the third quarter after a revised increase of 0.9% in the second quarter.
According to Statistics South Africa (Statistics SA), which announced gross domestic product (GDP) figures for the third quarter on Tuesday morning, mining showed the most growth, while nine of the ten industries on the production (supply) side of the economy were stronger in the third quarter.
Mining and quarrying, agriculture, forestry and fishing and trade, catering and accommodation recorded the highest growth rates as indicated in this graph:
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Nine industries showed the most growth, but electricity, water and gas disappointed
Mining output increased by 2.3%, driven predominantly by platinum group metals, with support from manganese ore, coal, chromium ore and copper. However, there was a decline in iron ore, diamonds, nickel and gold, but this was not enough to cause a significant dent in overall growth.
Agriculture carried over its positive momentum, recording its fourth consecutive increase. Statistics SA says the 1.1% increase in the third quarter was underpinned by stronger production of field crops, horticulture and animal products.
The trade, catering and accommodation industry also registered its fourth consecutive quarter of growth. Statistics SA says positive gains were recorded across the board, with stronger wholesale trade, retail trade, motor trade, accommodation and food and beverages.
General government was also positive, pulled higher by increased employment in national and provincial government and in extra-budgetary institutions.
An increase in air transport, communication and transport support services supported the 0.5% increase in the transport, storage and communication industry.
Construction turned positive at last after three consecutive quarters of decline, recording a marginal increase of 0.1%. Its positive showing was underscored by growth in non-residential buildings and construction works. Statistics SA says.
Electricity, gas and water were the only industries that disappointed in the third quarter, shrinking by 2.5% due to lower electricity production and usage. Water consumption was also lacklustre, contributing to the industry’s poor performance.
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Household consumption records sixth consecutive increase
The expenditure (demand) side of the economy was lifted by stronger gross fixed capital formation, household consumption, exports and government consumption as this graph shows:
According to Statistics SA, household spending expanded for a sixth consecutive quarter, increasing by 0.7%. Transport was the largest positive contributor, pushed higher mainly by an increase in new vehicle sales. The categories of clothing and footwear, and miscellaneous goods and services, recorded a decline, as this graph shows:
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Gross capital formation expanded, and exports increased, thanks to vegetables and minerals
After three consecutive quarters of decline, gross fixed capital formation (spending on infrastructure and other fixed assets) expanded by 1.6%, mainly driven by increased investment in transport equipment. The miscellaneous category’s ‘other assets’ was also a significant positive contributor, supported mainly by increased investments in ICT equipment and software.
Statistics SA also points out that South African exports increased by 0.7%, primarily led by increased trade in vegetable and mineral products. Imports increased by 2.2%, mainly influenced by an increase in the trade of machinery and electrical equipment, mineral products, textiles and textile articles and animal and vegetable fats and oils.
